College students often have enormous credit card bills that only
seem to get bigger each month.
But they are not helpless in their fight against seemingly
inescapable debt.
“Students should make their payments on time, be more
careful about how much debt they take on, and make sure they have
insurance,” said Liz Kemper, director of Student Legal
Services.
She said that sometimes students get into serious debt because
they do not have health or automobile insurance, and when an
accident occurs, they are stuck footing the bill.
But despite the unfathomable bill that can be attached to
uninsured medical attention, the biggest problem facing college
students is that they don’t pay their bills on time, said
Kate Williams, vice president of education for Money Management
International.
“It’s impossible to pay the full amount, it’s
too big,” said fifth-year sociology student Francis
Sillona.
Many students have credit cards that accrue 18 or 19 percent
interest on their debt every month.
Credit card companies, like Visa and Mastercard, only charge
students interest when their monthly payments are not paid in
full.
“If students are only paying the minimum monthly payment,
they are paying an exorbitant amount of interest,” Kemper
said.
To avoid this, Kemper said students should look for credit cards
with lower interest rates, and always try to pay their bills on
time.
If students wish to maintain good credit, it is vital they do
not have large outstanding debt. Making your monthly payment is the
best way to avoid this, Kemper said.
It is important students work toward good credit because their
credit report can be a determining factor in employment, apartment
leasing and loans, Williams said.
“Many employers and landlords are pulling credit
reports,” she said. “By having a positive credit
history, life is, in general, going to go much smoother.”
Good credit also has an influence on the rates at which students
can receive loans, and how favorable their credit card policy will
be, Williams added.
But still many students run up their credit card bills and pay
rent and other bills late, thus hurting their financial
credibility.
For Alonzo Martin del Campo, a second-year psychobiology
student, the cause of his bad credit is not being able to budget
his expenses.
“I have late payments on credit cards, cell phone bills,
rent and UCLA parking tickets,” he said.
Because of the stigma attached to college students using credit
cards, some students avoid the extra responsibility.
“It would be risky to have something that gives me the
impression I have money when I don’t,” said fourth-year
communications studies and sociology student Jeff Faes.
Other students are not worried about their credit history.
“Credit hasn’t been important to me yet because I
was able to use my parents’ credit (rating) to rent an
apartment,” Faes said.
But regardless of whether or not a student has a credit card,
they can still run into credit problems if they don’t pay
their bills on time.
Williams said that students will be more likely to pay their
bills in a timely manner if they watch their spending.
“You’ve got to have some kind of budget,” she
said.